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“I think we just witnessed the greatest political comeback in the history of the United States of America.” – JD Vance
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
We’ve been saying for quite some time now that half of the country would be waking up disappointed this morning and based on the results of the election so far, it appears to be slightly less than half of the country. Former President Donald Trump has been projected as the winner of the 2024 Presidential election, and he is also modestly ahead in the popular vote as well. Like it or not, when you look back at the last few years, objectively speaking, it’s hard not to agree with VP-elect JD Vance that this has to rank right up there as one of the biggest political comebacks in US history.
For the last several months now, we’ve been documenting the correlation between market performance and President Trump’s numbers in national polls and betting markets. It comes as no surprise, therefore, that equity markets are sharply higher given the fact that we have results this morning and they went in the Republican party’s direction. The S&P 500 shot higher overnight, and the S&P 500 tracking ETF is on pace to gap up over 2% which would be the largest upside gap since December 2022.
The move in small caps has been even more notable. Take a look at the chart below. The iShares Russell 2000 ETF (IWM) is trading up over 5% this morning, which would be the largest upside opening gap since “Pfizer Monday” on 11/9/2020 when the company announced the results of its vaccine trials. Today would be just the sixth time in the history of the iShares Russell 2000 ETF (IWM).
As equities rally this morning, bonds have tanked as yields surge. The yield on the 10-year has surged to 4.45%, which is the highest since early July. With that move, the iShares 20+ Year Treasury ETF (TLT) is poised to gap down 3.35%. That would rank as the largest downside gap in the history of the ETF and is one of just four times that it gapped down 2.5% or more. The others were 9/19/08 (-3.29%), 3/24/20 (-2.86%), and 5/10/10 (-2.53%).
